Understanding Meta Platforms's Position In Interactive Media & Services Industry Compared To Competitors

In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Meta Platforms META alongside its primary competitors in the Interactive Media & Services industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.

Meta Platforms Background

Meta is the world's largest online social network, with nearly 4 billion family of apps monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. The firm's ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm's total revenue, with more than 45% coming from the US and Canada and over 20% from Europe.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Meta Platforms Inc 28.41 8.38 9.12 8.17% $17.68 $29.82 27.26%
Alphabet Inc 27.11 7.46 7.02 8.21% $31.82 $46.83 15.41%
Baidu Inc 15.10 0.98 1.78 1.06% $3.64 $17.53 12.22%
Pinterest Inc 194.23 9.29 9.02 -0.8% $-0.05 $0.56 22.8%
Kanzhun Ltd 53.75 4.92 11.03 1.78% $0.1 $1.41 33.36%
ZoomInfo Technologies Inc 61.85 2.31 3.88 0.73% $0.06 $0.27 3.13%
Ziff Davis Inc 44.98 1.40 1.94 0.56% $0.07 $0.27 2.39%
CarGurus Inc 86.79 4.61 3.15 3.59% $0.03 $0.17 -6.97%
Tripadvisor Inc 115.31 3.11 1.47 -6.96% $0.02 $0.36 6.47%
Yelp Inc 23.07 3.38 1.98 1.92% $0.03 $0.31 6.5%
Weibo Corp 7.01 0.64 1.19 1.5% $0.09 $0.31 -4.42%
JOYY Inc 5.68 0.33 0.91 0.87% $0.05 $0.2 -3.27%
Getty Images Holdings Inc 53.57 2.39 1.71 2.11% $0.07 $0.16 -5.67%
Bumble Inc 68.35 0.91 1.45 1.52% $0.07 $0.19 10.22%
Shutterstock Inc 15.24 2.61 1.63 3.02% $0.04 $0.13 -0.45%
Cars.com Inc 12.96 2.81 1.99 0.16% $0.04 $0.15 7.85%
Average 52.33 3.14 3.34 1.28% $2.41 $4.59 6.64%

When conducting a detailed analysis of Meta Platforms, the following trends become clear:

  • The Price to Earnings ratio of 28.41 is 0.54x lower than the industry average, indicating potential undervaluation for the stock.

  • The elevated Price to Book ratio of 8.38 relative to the industry average by 2.67x suggests company might be overvalued based on its book value.

  • The Price to Sales ratio of 9.12, which is 2.73x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • The Return on Equity (ROE) of 8.17% is 6.89% above the industry average, highlighting efficient use of equity to generate profits.

  • Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $17.68 Billion, which is 7.34x above the industry average, indicating stronger profitability and robust cash flow generation.

  • The gross profit of $29.82 Billion is 6.5x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

  • The company's revenue growth of 27.26% exceeds the industry average of 6.64%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By considering the Debt-to-Equity ratio, Meta Platforms can be compared to its top 4 peers, leading to the following observations:

  • Meta Platforms exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.25.

  • This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

Key Takeaways

The PE, PB, and PS ratios for Meta Platforms indicate that it may be undervalued compared to its peers in the Interactive Media & Services industry. On the other hand, Meta Platforms shows strong performance in terms of ROE, EBITDA, gross profit, and revenue growth, suggesting a competitive position within the industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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